Some Movement on a Host of Global Trade, Tax and Commerce Issues.

         Gloabl Investment 1
 A host of trade and global commercial issues continue to create newer international actions and concerns. Among them are China’s use of antitrust law as a trade restriction, Japan’s currency manipulation to increase exports, recent U.S. litigation concerning LIBOR, FOREX and the 1990 Anti-Terrorism law, renewed agreement with India on the ‘Bali” (Trade Facilitation Agreement), agreement on the Information Technology Agreement (ITA) between China and the U.S. at the recent APEC meeting, and formulation of principles concerning ‘beneficial ownership’ of shell companies in the context of international taxation and corruption) (this being in addition to the prior OECD action concerning automatic exchange of tax information). Here are some particulars:
….. The Republican agenda after the 2016 midterm elections involves passing “fast-track,” supporting TTP / TTIP, increased energy exports (crude and natural gas), lifting some restrictions on banks, and perhaps some cooperation on overseas taxation. 2014 Midterm Elections …. Republican Legislative Action.Financial Times (Nov. 4, 2014); “Revive Fast-Track — After the Midterms.” Washington Post (Editorial 11.7.14)
….. Apple borrows money abroad (and this is tax deductible) to buy back shares but keeps profits abroad (which are not taxable as long as not repatriated). “Apple’s Borrowing Abroad.” Washington Post (Nov. 5, 2014).
….. After Japan’s surprise monetary moves currency manipulation is now back on the table in negotiating the TPP. This surprise action presents a renewed challenge to Obama’s trade policies. There is increasing congressional support for provisions combating currency manipulation (by China, Japan and others) in both TPP negotiations and congressional legislation generally. “Currency Manipulation and Obama’s Trade Policy.” Financial Times (Nov. 7, 2014).
….. In the forthcoming APEC summit the U.S. needs to persuade China to better abide by int’l rules ranging from trade & commerce to territorial & cybersecurity issues. China does abide by many of these rules. But strengthening China’s acceptance of these int’l rules and institutions should be shown to be in its national interests. However, these rules and institutions do need to evolve to adjust to newer global developments involving many newer global players. This growth in global governance is in the national interest of the U.S. also.  “Obama and Beijing and Economic Strains.Washington Post (Nov.9, 2014).
….. China is aggressively enforcing its new antitrust laws against U.S. multinationals. Trade protectionism? Maybe, maybe not. Understanding national legal and regulatory systems in the context of global trade and commerce is essential. They are part of the bedrock and fabric of global trade relations. “No Longer Business as Usual in China.New York Times (11.10.14). 
….. Often overlooked is the extraterritorial reach of U.S. laws under the Anti-Terrorism Act as amended by the Patriot Act. This allows public & private actions (including treble damages) against foreign banks for money laundering related to terrorism. Significant cases have been decided and others are pending.  “Banks and Financing Terror Cases.” New York Times (Nov. 11, 2014). 
….. Expanding the International Technology Agreement is a big deal for both U.S.-China trade and the WTO. It will reduce tariffs on $1tn of high-tech goods. This plurilateral agreement is the first significant reduction of tariffs by the WTO in over 15 years. It also signals a shift somewhat away from all encompassing trade agreements to more limited ones. But it keeps the WTO relevant to this newer process and to expanding trade. “China and U.S. and Future Trade Agreement.Financial Times (Nov. 11, 2014). 
….. FOREX and LIBOR settlements demonstrate the broad foreign reach of U.S. financial laws in civil matters. Now is the time to look at criminal prosecutions of global banks and individuals in this global financial conspiracy. This global conspiracy has broadly impacted U.S. businesses and individuals at all levels in he U.S. and abroad.  “Forex and Libor Scandals.” Financial Times (11.13.14). 
….. The G20 adopted principles as to beneficial-ownership involving shell companies that is behind corruption, tax evasion & money laundering. This builds upon prior actions concerning tax avoidance. 70% of corrupt money taken out of developing countries are through such shell companies and trusts. “G20, Beneficial Ownership and Corruption.” Financial Times (11.17.14). 
….. The recent breakthrough with India on the Bali discussions (as to the Trade Facilitation Agreement) and the U.S. – China Informational Technology Agreement (ITA) announced at the APEC meeting highlights, in fact, the weakness of the WTO. But it’s a good thing that these happened. It gives a chance for the WTO to move forward at least through limited multilateral action via plurilateral agreements. “WTO Breakthroughs and Structural Problems.” Financial Times (11.17.14).
….. The U.S. has lost yet another WTO case concerning ‘zeroing’ and antidumping duties.” Panel on Vietnam and U.S. Dispute.” WTO News (11.17.14).

 

 

 

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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